Free Trade Implementation Activity (FTIA) August–October 2014 Quarterly Report

In coordination with USAID, FTIA adopted the same project name as the predecessor project—USAID Facilitando Comercio—for continuity purposes. While much of the project's first quarter has been centered on administrative tasks, such as branding, office set-up, and team recruitment, efforts to solidify technical assistance were also prioritized, allowing the project to finalize its first year work plan and its performance management plan. USAID Facilitando Comercio conducted a series of meetings to validate priorities amongst key counterparts—customs (DIAN), the Ministry of Trade, Industry and Tourism (MinCIT), and private sector trade associations (FITAC and CLADEC). Validation of activities coincided with the formation of President Santos' new administration. Meetings with key offices were slightly delayed as a new Director of DIAN, a new Minister of MinCIT, and new directors of technical divisions took office. Much of the project's resources during this first quarter of operation were dedicated to ensuring technical assistance was coordinated at an inter-agency level both within the Government of Colombia (GOC) and the U.S. Government (e.g. Foreign Agriculture Service, Foreign Commercial Service). Preliminary and ad-hoc coordination meetings were also held with other technical assistance initiatives, such as the Canadian Border Services Agency (CBSA) and the Inter-American Development Bank (IDB). USAID Facilitando went to great lengths to ensure the design of technical assistance and project commitments were in line with the GOC's trade and reform agenda so that project activities result in a sustained effort to build internal capacities and in turn strengthen Colombia's capacity to facilitate trade. The Free Trade Implementation Activity (FTIA) is focused on improving customs policies and enforcement practices in Colombia. Technical assistance under Component 1 is centered on improving operational and technical aspects of customs and trade, particularly as it relates to imports. Activities are also intended on improving border management transparency and importer compliance. Activity 1.1, Develop Inspector Training Program, aims to improve the skills and knowledge of customs inspectors. The lack of standardized training within the inspector group leads to poor operational practices and unnecessary clearance delays. DIAN has committed to making the pilot training program mandatory, ensuring inspectors are allotted the necessary time to participate in the training, selecting inspectors with an expected career trajectory, minimizing job rotations to the extent possible, and allocating a budget for the future implementation of the program. Activity 1.2, Implement Advance Ruling System, involves the issuance of advance rulings prior to imported goods entering the country at the request of the exporter, importer or producer. DIAN has already moved forward with publishing the request for an advance ruling on tariff classification, a form the previous USAID Facilitando Comercio project developed. The private sector can now download the form from DIAN's website. Technical training for issuing rulings is also a key component of Activity 1.2. DIAN is currently identifying priority sectors according to import volumes and sectorial familiarity. USAID Facilitando Comercio held a coordination meeting with Canada's Border Services Agency (CBSA), which has a technical assistance program with DIAN under the context of its free trade agreement. CBSA expects to train DIAN on valuation fundamentals, covering the WTO Customs Valuation Agreement. Plans to bring valuation experts from US Customs and Border Protection (CBP) and the customs agencies of Argentina, and Canada were discussed with DIAN's technical division. DIAN would like to explore pre- and post-entry practices as inspectors currently manage most valuation estimations directly at the time of inspection. Changing this practice would have direct impact on clearance times. USAID Facilitando Comercio will assist with subject-matter expertise and, if possible, work with the customs code drafters, as a demand-driven activity, to reflect any relevant change in the code while its approval remains pending. The implementation of an appeals process for advance rulings is also a key component of Activity 1.2. Under the new customs code, the appeals process will be managed by DIAN's Legal Counsel Office. DIAN's technical division requested the project's assistance in beginning to engage Legal Counsel to provide training on the appeals process.